PARIS, May 13 (Reuters) - The French parliament rejected a bill on genetically modified (GM) crops on Tuesday after hundreds of activists marched in Paris to protest against a text they said blurred the line
between natural and GM foods.

In a shock move, National Assembly members used a procedural veto to block debate on the text, postponing a vote indefinitely. The veto was passed by 136 votes to 135, mostly due to the absence of many legislators from the ruling party, which has been divided on the bill.

The bill was intended to lay down conditions for the cultivation of GM crops in France, Europe's largest grain producer and exporter, and create a body to oversee GMO use.

Prime Minister Francois Fillon said immediately after the vote he would ask a committee to work on a new bill that would be submitted to the lower and upper chambers. The new bill could be very similar in content since Tuesday's vote was on a technicality, not on the substance of the bill.

The setback for the government's bill is the latest sign that the debate on transgenic food is still vivid in France.

Polls show that a vast majority of people are opposed to GM crops because they lack proof that they pose no risk to consumers and the environment.

Opposition parties including the Socialists and the Greens, as well as environmental activists, welcomed the news.

"The government has been defeated, clearly and starkly, on a subject that worries the French," the head of the Socialist group at the National Assembly said.

Hundreds of protesters, some wearing yellow hats in the shape of maize cobs and others dressed in white suits imitating scientists, had gathered near the National Assembly ahead of the debate to voice their opposition to the proposed text.

"We must give consumers the choice of eating quality products, with or without GMO," said Jean Terlon, a cook at the restaurant Le Saint-Pierre in Longjumeau, close to Paris.

While GM crops are common in the United States and Latin America, France and many other European countries are dubious about using the new genetic technology in agriculture.France banned the sole GM crop grown in the European Union, a maize (corn) developed by U.S. biotech giant *Monsanto* , in February because it had serious doubts about whether it was environmentally safe. GMO cultivation is still legal, however.

The new French bill was criticised both by pro-GMOs who said it did not go far enough and by opponents, including members of the ruling majority, who said changes made in exchanges between the parliament and the upper house had made it too lax.

"The problem of this law is that it legalises contamination because anything with a GMO content of less than 0.9 percent can be called GMO-free," Romain Chabrol, a spokesman of the environmental group Greenpeace France, said. (Additional reporting by Geert de Clercq, Writing by Sybille de La Hamaide, Editing by Sami Aboudi)